Shareholders of Kesko Oyj (HEL:KESKOB) will be pleased this week, given that the stock price is up 11% to €67.72 following its latest annual results. Revenues were €11b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of €3.42 were also better than expected, beating analyst predictions by 14%. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
Taking into account the latest results, the current consensus from Kesko Oyj's five analysts is for revenues of €11.1b in 2020, which would reflect a credible 3.5% increase on its sales over the past 12 months. Statutory earnings per share are expected to dip 5.9% to €3.11 in the same period. In the lead-up to this report, analysts had been modelling revenues of €11.1b and earnings per share (EPS) of €3.02 in 2020. So the consensus seems to have become somewhat more optimistic on Kesko Oyj's earnings potential following these results.
Analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 5.3% to €59.40. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Kesko Oyj at €65.00 per share, while the most bearish prices it at €55.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. Next year brings more of the same, according to analysts, with revenue forecast to grow 3.5%, in line with its 4.3% annual growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 3.5% next year. It's clear that while Kesko Oyj's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the market itself.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around Kesko Oyj's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. There was also a nice increase in the price target, with analysts feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Kesko Oyj analysts - going out to 2024, and you can see them free on our platform here.
You can also see whether Kesko Oyj is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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